We analyse the American Small Business Investment Companies (SBIC) program designed to help small and medium sized businesses find venture capital. SBICs are private entities that may be financed by the Small Business Administration under favourable conditions. The success of this program should inspire public policy makers in other countries. Indeed, SBICs have financed numerous traditional and high tech SMEs at a low or zero cost for the government. The rules of government intervention are very similar to those of private financing. The program rests on strong governance, clear rules and stakeholder accountability. The SBA is powerful and the SBICs are stringently governed. The private status of SBICs, their sizeable initial funding, the third party certifying the quality of the project and officers with proven management capacity may explain the success of the program.

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